Fig. 1 shows a finance decision map prepared by the owner of a dog-grooming business. She needs $9,000 for a wash station and dryers. The business has opera...

Assessment: Business 9225 | Paper 2 Mock 01 | Written Paper 2 Subject: Business - 9225

Question 1 Report

Fig. 1 shows a finance decision map prepared by the owner of a dog-grooming business. She needs $9,000 for a wash station and dryers. The business has operated for only six months and has limited retained profit.

Need $9,000 forequipmentOwner savings:$2,000External finance:$7,000Choose loanor lease© EAGLE BEACON GLOBAL

(a) Identify the amount of external finance needed in Fig. 1. [1]
(b) Which option allows the business to use dryers without buying them immediately? [1]
(c) Explain one reason why the owner may prefer a loan to leasing the equipment. [2]

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